Balanced scorecards in managinghigher education institutions:

an Indian perspectiveVenkatesh Umashankar and Kirti Dutta

Institute for International Management and Technology, Haryana, India

Abstract

Purpose – The paper aims to look at the balanced scorecard (BSC) concept and discuss in what wayit should be applied to higher education programs/institutions in the Indian context.

Design/methodology/approach – The paper is based on extant literature on the balancedscorecard concept per se, as well as applications of BSC in higher education as reported by otherresearchers.

Findings – The BSC approach offers an institution the opportunity to formulate a cascade ofmeasures to translate the mission of knowledge creation, sharing and utilization into a comprehensive,coherent, communicable and mobilizing framework – for external stakeholders and for one another.

Research limitations/implications – In the absence of any specific Indian case study, the possibleimpact could only be conjectured or deduced.

Practical implications – A useful model is proposed that can be adapted with appropriatemodifications to the management of tertiary institutions of education in India, whether it be auniversity, affiliate college, autonomous institution or private educational institution.

Originality/value – In the absence of evidence of the application of BSC to the educationalinstitutional domain in India, the current paper may be a starting-point for a debate and possiblestrategies to implement BSC methodology in this area.

Keywords Balanced scorecard, Strategic management, Higher education

Paper type Conceptual paper

IntroductionOrganizational failure can usually be traced to deficient strategic planning, poororganization structure, recruitment and retention of staff, ineffective or nonexistentinternal control, and a lack of communication and feedback. On a more operationallevel, poor budgeting and inattention to cash-flows are also often the cause oforganizational failure. Educational institutions of higher learning are no different, it isjust that in the Indian context, traditionally these institutions have been controlled bythe government and hence at times strategic management and its derivative tenets arenot so visible in the initiation and operation of such institutions.

Heimerdinger (2002) indicates a need for training perceived by non-profit managersthat manifests the traditional concerns of human services professionals who findthemselves promoted into managerial positions without the benefit of traditionalformal training in management – referring to those tasks usually defined by suchactivities as planning, organizing, motivating and controlling and feedback.Subtending all of these is the need for leadership. If we juxtapose the abovecomment with the fact that educational institutions of higher learning in India,traditionally have been “administered” (managed) in a way in which academic staff

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International Journal of EducationalManagementVol. 21 No. 1, 2007pp. 54-67q Emerald Group Publishing Limited0951-354XDOI 10.1108/09513540710716821

have been given apex positions in the administrative hierarchy, it does highlight thisneed for developing managerial capacity.

Universities world-over are facing the challenge of being centres of excellence forteaching as well as research. On one hand universities are increasingly being requiredto teach ever increasing number of students in increasing numbers of specialisationsand disciplines, and on the other they are being asked to pay more attention to qualityof teaching and educational programs (Smeby, 2003). This again indicates at therequirement to re-look at the ways institutions of higher learning are to be managed.

The current paper looks at focusing attention on one of the contemporary tools ofmanagement namely, the balanced scorecard (BSC), and tries to discuss how it may bebeneficial in the strategic management of the higher education institution in India.

Tertiary education in IndiaIn India, the University system, as we see today, originated about a century and halfago with the establishment of universities at Calcutta, Madras, Bombay, Allahabadand Lahore between 1857 and 1902. These were modelled after the British Universitiesof that period. The Central Advisory Board of Education’s (CABE) Committee onAutonomy of Higher Education Institutions (2005) in its report states that currently theIndian higher education system consists of 343 university level institutions and about16,885 colleges and that there are many nagging concerns about its role andperformance. Many of our reputed universities and colleges have lost their pre-eminentpositions. Only a few manage to maintain their status and dignity in an environment ofcomplex socio-economic pressures and worldwide changes in approaches to theeducational processes. Under the rapidly expanding situation with multiplicity ofexpectations from the higher education system, it has become necessary to identifythose attributes, which distinguish a first-rate institution from a mediocre one. Thecomplex array of associated issues deserves a total rethinking of our approach tohigher education. Serious efforts are now underway to develop the policy perspectivesin education involving deeper national introspection and fundamental changes in thestructure, content and delivery mechanisms of our university system.

The report further indicates that the enrolment in the Indian higher educationsystem has increased from 7.42 million in 1999-2000 to about 9.7 million at present,indicating nearly 10 percent annual growth. The colleges account for about 80 percentof the enrolment with the rest in the university departments. Thus the programmesavailable in the college system largely determine the quality of our higher education. Inthe past decade there has been a sharp increase in the number of private colleges aswell as universities with the status of either deemed to be universities or stateuniversities. The proportion of eligible age group wishing to enter higher educationalinstitutions will most likely increase significantly from the present level of about 7 percent. The regulatory mechanisms will perhaps be liberalized. Higher education iscontinuing to expand, mostly in an unplanned manner, without even minimum levelsof checks and balances. Many universities are burdened with unmanageable number ofaffiliated colleges. Some have more than 300 colleges affiliated to them. Newuniversities are being carved out of existing ones to reduce the number of affiliatedcolleges. Under these circumstances, our dependence on autonomy as the means toimprove quality of such a huge size of higher education system poses seriouschallenges.

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Venkatesha (2003) compares and finds a lot of differences in the work-culturebetween the teachers of postgraduate departments of universities with those ofcolleges. In degree colleges, teaching is the only mandate and pertaining to this,teachers have to improve their knowledge in teaching by undergoing orientation andrefresher courses, summer-camps, workshops and participating in seminars/symposiafrom time to time. On the basis of these activities, teachers are considered forpromotion to the next cadre. Some college teachers, who are interested in research mayconduct research and publish papers. Research activity of college teachers is invariablyout of their natural interest rather than a yardstick for their promotion unlike inuniversities. Once a university teacher acquires a PhD degree, many universityteachers lapse into routine teaching assignments. Because of this type of dual role ofteaching and research without defined guidelines, university teachers can neglecteither teaching or research, or sometimes both. In Indian universities, teachers arepromoted based on their research publications, books written, papers presented inseminars/symposia, membership of various academic societies, etc., but muchimportance has not been given to the teachers’ contributions towards teaching.

This type of situation in our universities tempts many teachers to neglect teachingand take up some sort of research mostly uneconomical, unproductive, outdated andrepetitive type and venture into the business of publishing substandard researcharticles. The system normally recognizes quantity like number of PhD students guided,number of papers published, etc. rather than quality of the research and publications.Unfortunately, no concrete method has been developed so far to judge the teaching andresearch aptitude of university teachers. Some academicians argue that both teachingand research cannot be done at the same point of time. However, it is generally thoughtthat education (even from undergraduate level) and research should coexist tocomplement each other. Special emphasis on assessment-oriented teaching andresearch will impart a new dimension to the role of the teacher.

Commenting upon the inherent contradictions in higher education and research insciences, Chidambaram (1999) indicates towards a peculiar situation existing in thecountry. Wherein on one hand a large number of people are being given post-graduatedegrees in science disciplines, without an appreciation of their possible future careers;on the other hand, there is a considerable reduction in the number of such talented andmotivated students seeking admissions to science courses. The dilution of resourcesthat this irrelevant training represents has the consequence of deteriorating the qualityof the training for the really talented people.

Staying on with science education, Narlikar (1999) identifies – poor methodology ofscience teaching that encourages rote learning, ill-equipped teachers and labs, lack ofinspirational and committed teachers, poorly written text-books, peer pressure to joinlucrative courses; as some of the causes of the current sickness that has afflicted thescience scenario. The romance of science and a proper and correct image is just notgetting projected by our institutions or the universities. In his opinion this unfortunatetrend can be reversed if the society displays a will and creates an environment to curethe causes of the deeply entrenched malady.

Altbach (2005) provides an overview of the ailments afflicting the higher educationmachinery in India when he says that India’s colleges and universities, with just a fewexceptions, have become “large, under-funded, ungovernable institutions”. Many ofthem are infested with politics that has intruded into campus life, influencing academic

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appointments and decisions across levels. Under-investment in libraries, informationtechnology, laboratories, and classrooms makes it very difficult to provide top-qualityinstruction or engage in cutting-edge research. Rising number of part-time and ad hocteachers and the limitation on new full-time appointments in many places have affectedmorale in the academic profession. The lack of accountability means that teaching andresearch performance is seldom measured with the system providing few incentives toperform. He goes on to say that India has survived with an increasingly mediocrehigher education system for decades. Now as India strives to compete in a globalisedeconomy in areas that require highly trained professionals, the quality of highereducation becomes increasingly important. So far, India’s large educated populationbase and its reservoir of at least moderately well-trained university graduates havepermitted the country to move ahead. He concludes that the panacea to the ailments ofIndian universities is an academic culture based on merit-based norms and competitionfor advancement and research funds along with a judicious mix of autonomy to docreative research and accountability to ensure productivity. He rightly says that“world class universities require world class professors and students – and a culture tosustain and stimulate them”.

He recommends a combination of specific conditions and resources to createoutstanding universities in India including:

. sustained financial support, with an appropriate mix of accountability andautonomy;

. the development of a clearly differentiated academic system – including privateinstitutions – in which academic institutions have different missions, resources,and purposes;

. managerial reforms and the introduction of effective administration; and

. truly merit-based hiring and promotion policies for the academic profession, andsimilarly rigorous and honest recruitment, selection, and instruction of students.

Misra (2002) identifies “management without objectives” as one of the key reasons ofthe downfall of the Indian university system. He highlights the need for – adopting afunctional approach in our universities; periodic academic audits; greater autonomyand accountability in all spheres of operations; open door policy welcoming ideas andpeople from all over; administrative restructuring decentralizing universitydepartments and schools; and making education relevant to our people and times; asthe basic steps in improving the Indian universities.

The above discussion establishes the need for accountability based autonomy andbeing consistently relevant to the context in which the Indian universities (or any otheruniversity anywhere for that matter) may exist. This creates the backdrop for adoptingthe basic tenets of strategic management in the paradigms of operating ouruniversities. The balanced scorecard is one such basic tool that can certainly be ofassistance in this rationalization process.

The balanced scorecardRobert S Kaplan and David P Norton (1992) first introduced the concept of balancescorecard in their Harvard Business Review article “The Balance Scorecard – Measuresthat Drive Performance”. Focussing on the fact that managers needed a balanced

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presentation of both financial and operational measures they propounded fourperspectives as the drivers of future financial performance:

(1) Customer perspective – how do customers see us?

(2) Internal perspective – what must we excel at?

(3) Innovation and learning perspective – can we continue to improve and createvalue?

(4) Financial perspective – how do we look to stakeholders?

The scorecard provides executives with a comprehensive framework that translates acompany’s strategic objectives into a coherent set of performance measures. Itrepresents a fundamental change in the underlying assumptions about performancemeasurement and helps focus the strategic vision.

According to Kaplan and Norton (1993) local improvement programs such asprocess reengineering, total quality and employee empowerment lack a sense ofintegration. The BSC can serve as the focal point for the organizations efforts. ISOModel for excellence introduced in 1987 aims to produce a product/ service “right firsttime” by standardizing the functions in different departments and performing regularaudits and continuous improvement is observed but it does not take the customers intoaccount. However scorecard takes customers as one of the perspective. It puts strategyand vision, not control, at the centre. It allows people to adopt whatever behaviour andwhatever actions are necessary to arrive at these goals (Kaplan and Norton, 1992).Thus the whole arena is open for innovative ideas and action plans.

The BSC is not just a measurement system; it is a management system to motivatebreakthrough competitive performance and is most successful when used to drive theprocess of change (Kaplan and Norton, 1993).

Kaplan and Norton (1996b) say that in BSC application the management shifts fromreviewing the past to learning about the future. It retains the measures of financialperformance – the lagging outcome indicators – but supplements these with measuresand the drivers – the lead indicators – of future financial performance (Kaplan andNorton, 2001a). Also, the evidence inconsistent with the BSC performance modeltriggers a double-loop learning process.

BSC’s widespread adoption and use is well documented, for example Kaplan andNorton (2001) reported that by 2001 about 50 per cent of the Fortune 1,000 companiesin North America and 40-45 per cent of companies in Europe were using the BSC (citedin Karathanos and Karathanos, 2005). In 2001 Kaplan and Norton formulated a newframework namely, the “Strategy Map” – a comprehensive architecture for describingstrategy. It provides a visual representation of the strategy and is a single page view ofhow objectives in the four perspectives integrate and combine to describe the strategy(Kaplan and Norton, 2004).

Application of BSC in educationIt is evident that the BSC has been widely adopted in the business sector but theeducation sector has not embraced the BSC concept widely as indicated by the dearthof published research on this topic (Karathanos and Karathanos, 2005). Cullen et al.,(2003) proposed that BSC be used in educational institutions for reinforcement of theimportance of managing rather than just monitoring performance. Sutherland (2000),

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(cited in Karathanos and Karathanos, 2005) reported that the Rossier School ofEducation at University of Southern California adopted the BSC to assess its academicprogram and planning process. Also Chang and Chow(1999) reported in a survey of 69accounting departments heads that they were generally supportive of the BSCapplicability and benefits to accounting education programs. Ivy(2001) studied howuniversities in both UK and South Africa use marketing to differentiate their images inthe higher education market. At a time when higher educational institutions around theglobe face declining student numbers and decreasing funding grants it becomesimperative for them to determine their images in the eyes of their various publics.Karathanos and Karathanos(2005) describe how the Baldrige Education Criteria forPerformance Excellence has adapted the concept of BSC to education and discusssignificant differences as well as similarities between BSC for Business and BSC foreducation.

In higher education as in business there are acceptable conventions of measuringexcellence. Rather than emphasizing financial performance, higher education hasemphasized academic measures. As in the case of business the demands of externalaccountability and comparability, measurement in higher education has generallyemphasized those academic variables that are most easily quantifiable (Ruben, 1999).These measures usually are built on and around such aspects as faculty/studentnumbers (ratios), demographics; student pass percentages and dispersion of scores;class rank, percentile scores; graduation rates; percentage graduates employed ongraduation; faculty teaching load; faculty research/publications; statistics on physicalresource (see library, computer laboratories etc.). Ruben(1999) indicates that one areadeserving greater attention in this process of measurement is – the student, facultyand staff expectations and satisfaction levels. He opines that in most higher educationcentres very little attention is paid to systematically measuring students’, faculty andstaff satisfaction despite sharing the widely accepted viewpoint that attracting andretaining the best talent/people is the primary goal and critical success factor forinstitutions of higher learning.

In a study conducted by Ewell, (1994) (cited in Ruben, 1999), the measures used in 10states in the USA in performance reports of higher education institutions, were:

. Enrolment/graduation rates by gender, ethnicity and program.

. Degree completion and time to degree.

. Persistence and retention rates by gender, ethnicity and program.

. Remediation activities and indicators of their effectiveness.

. Transfer rates to and from two and four year institutions.

. Pass rates on professional exams.

. Job placement data on graduates and graduates’ satisfaction with their jobs.

Faculty workload and productivity in the form of student/faculty ratios andinstructional contact hours.

Karathanos and Karathanos (2005) have compared the Baldrige Award and BSCcriteria in the context of education and have come out with measures closely alignedamongst both the instruments (see Table I).

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Applicability and design of BSC in the Indian environmentReview of extant literature indicates that business organizations, as well as academicinstitutions, are fundamentally rethinking their strategies and operations because ofchanging environment demanding more accountability. The BSC is described as anovel approach to face these challenges (Dorweiler and Yakhou, 2005). The strategiesfor creating value in education need to be based on managing knowledge that creates

Education Business

1. Student learning results: results should be basedon a variety of assessment methods, shouldreflect overall mission and improvementobjectives. Should reflect holistic appraisals ofstudent learning

1. Customer-focused results: customer satisfactionmeasurements about specific product andservice features, delivery, relationships andtransactions that bear upon the customersfuture actions

2. Student and stakeholder focused result: studentand stakeholder satisfaction measurementsabout specific educational program and servicefeatures. Delivery, interactions and transactionsthat bear upon student development andlearning and the students and stakeholdersfuture actions

2. Product and service results: key measures orindicators of product and service performanceimportant to the customers

3. Budgetary financial and market results:instructional and general administrationexpenditure per student, tuition and fee levels,cost per academic credit, resources redirected toeducation from other areas, scholarship growth

3. Financial and market results: return oninvestment, asset use, operating margins,profitability, liquidity, value added peremployee

4. Faculty and staff results: innovation andsuggestion rates; courses or educationalprograms completed; learning; on-the-jobperformance improvements; cross-trainingrates; collaboration and teamwork; knowledgeand skill sharing across work functions, unitsand locations; employee well-being, satisfactionand dissatisfaction

4. Human resource results: innovation andsuggestion rates; courses completed; learning;on-the-job performance improvements;cross-training rates; measures and indicators ofwork system performance and effectiveness;collaboration and teamwork; knowledge andskill sharing across work functions, units, andlocations; employee wellbeing, satisfaction anddissatisfaction

5. Organizational effectiveness results: (includingkey internal operations performance measures)capacity to improve student performance,student development, education climate,indicators of responsiveness to student orstakeholder needs, supplier and partnerperformance, key measures or indicators ofaccomplishment of organizational strategy andaction plan

5. Organizational effectiveness results: (includingkey internal operations performance measures)productivity, cycle time, supplier and partnerperformance, key measures or indicators ofaccomplishment of organizational strategy andaction plan

6. Governance and social responsibility results:fiscal accountability, both internal and external;measures or indicators of ethical behaviour andstakeholder trust in the governance of theorganization; regulatory and legal compliance;organizational citizenship

6. Governance and social responsibility results:fiscal accountability, both internal and external;measures or indicators of ethical behaviour andof stakeholder trust in the governance of theorganization; regulatory and legal compliance;organizational citizenship

Source: Karathanos and Karathanos, 2005

Table I.Expected measures inBSC and Baldrige criteriafor education andbusiness

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and deploys an organization’s intangible assets. The scorecard defines the theory of thebusiness on which the strategy is based hence the performance monitoring can take theform of hypothesis testing and double-loop learning. A good BSC should have a mix ofoutcome measures and performance drivers (Kaplan and Norton, 1996b).

Marketing and communication strategies vis-a-vis institutions of higher educationassume greater import as the image portrayed by these institutions plays a critical rolein shaping the attitudes and perceptions of the institution’s publics towards thatinstitution (Yavas and Shemwell, 1996). In India, for instance, institutions of highereducation are becoming increasingly aggressive in their marketing activities. In thisincreasingly competitive environment, the marketers of higher education should beconcerned about their institution’s positioning and image.

The marketing of educational programmes has attracted attention of researcherswho have identified research-based planning and programme development,relationship marketing and non-traditional methods for education delivery as keyareas for future focus (Hayes, 1996). Some of the reasons for marketing of highereducation gaining importance in the management of higher education programs andinstitutions are – the founding missions being found increasingly ill-suited for thedemands of the marketplace; budgets becoming excruciatingly tight whiledepartments and programmes clamouring for more support; the recruiting andfund-raising arenas having become extremely competitive as well as hostile; highereducation being more and more dominated by many largely undifferentiated collegesand universities offering similar programmes; demographic shifts in the operatingenvironment marked by diminishing numbers of traditional full-time students, fewerfull-pay students and fewer residential students; escalating demand for adulthigher-education and continuing and special-focus programmes; and last but not theleast, the sharp rise in the cost of higher education (Kanis, 2000). In India too recentlyas liberalization has progressed, although in fits and starts, governmental support toinstitutions of higher learning in the form of grants and subsidies, is drying up. Themovement of self-sustenance is gaining force. This also adds up and forces managersof educational institutions, especially in the public domain, to re-think their missionand strategies (Venkatesh, 2001).

Ruben(2004) says that students are affected not only by the teaching environmentbut also by the learning environment, which includes facilities, accommodation,physical environment, policies and procedures, and more importantly, interpersonalrelations and communication and from every encounter and experience. Hence thefaculty, staff and administrators have to set good examples by their deeds andrecognize that everyone in an institution is a teacher. Keeping in mind that thecontinual self-examination by institutions should focus on the institution’scontribution to students’ intellectual and personal development, we can propose thefollowing model (Tables II-V) for BSC in the Indian higher education scenario largelybased on the analysis of the findings presented variously by (Chang and Chow, 1999;Stewart and Carpenter-Hubin, 2000, Ivy, 2001; Cribb and Hogan, 2003; Karathanos andKarathanos, 2005).

As depicted in the construct above a wide range of stakeholders and their diverseclaims/interests and objectives have to be addressed in the context of the institution ofhigher education in India. The customer perspective is supposed to aim at theimmediate needs and desires of the students, parents, faculty and staff, alumni, the

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Objective Measures

Students/parentsHighly valued programQuality academic advisingFlexible course schedulingQuality instructionEffective student placement

External rankings in press, percentage of enrolmentout of applicationsStudent evaluation of advisingStudent satisfaction surveyAlumni evaluation, graduating student surveyAccreditation, recruiter evaluation, professionalexam-passing ratePercent of students with job offer at graduationNo. of companies recruiting on campus, averagestarting salaries

Faculty/staffGrowth opportunitiesLearning opportunities

Salary growth over period of timeCourses or educational programs completedKnowledge and skill sharing across work functions,units and locationsEmployee wellbeing

AlumniKnowledge updation with passage of timeKnowledge reinforcement

Alumni feedbackAlumni satisfaction survey

CorporateHiring quality studentsKnowledge extension i.e. research,consultancy, training, continuing educationrelated linkages

Number of students hiredNumber of job offers per studentAverage salaries offeredNumber of people benefiting from training programsconducted by institutionGrants/endowments garnered from industry

SocietyGood citizenship Numbers of alumni in public service, community

service, NGOsPhilanthropic record of alumni, faculty, staffLegally clean record of alumni, faculty, staff

Table II.Component one: customerperspective – includingstudents, faculty, staff,alumni, parents, andcorporations

Objective Measures

To achieve continuous improvement ofservices, facilities and resources

Meeting service standards, response time to customer;service facilities to staff

To improve new product and servicedevelopment

Number of new products and services introduced i.e.new courses, syllabi, programs and curriculumchanges

Quality assurance Distribution of grades awarded, exit exam or studentcompetency evaluation

Internship program Number of internships available, number of companiesavailable, student evaluation

Cost efficiency Faculty-to-student ratio, educational expenses perstudent

Unique or specialized curriculum Number of faculty in specialized area, number ofschools offering the same program

Table III.Component two: internalbusiness perspective:student/stakeholder focus

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corporate sector and the society at large. It is relevant here to state that looking atstudents solely as customers becomes a sort of a misnomer as they are also (if not only)the “throughput” that eventually gets processed in the institution and ends up accepted(or rejected) at the verge of graduation. Hence the corporation and society at largeshould be considered as the real customers. The second component involves theinternal business or operations perspective. This inherently focuses on theimplementation and delivery of the academic, research and other programs by theinstitution and the degree of excellence achieved in the same. The innovation andlearning perspective of the organization looks at the development of faculty and staffas a precursor and foundation to excellence in program design and delivery. Finally,the fourth component constitutes of the financial performance and its measure. It isclear in the Indian context especially, that the government although eschews the“profit” word for educational institutions, however is emphasizing more and more onself sustaining programs and institutions as a desirable outcome of the strategies andmodels envisaged and pursued by universities and colleges. Surpluses are important asonly then institutions can look for achieving greater autonomy in designing anddelivering ever new courses and programs that are relevant to the population in

Objective Measures

Faculty professional growth Number of faculty presentations at conferences;number of faculty presentations; number of seminarsattended, travel budget for conference attendance

Staff motivation and development Percent of budget spent on staff development; staffsatisfaction index in staff survey; number ofcross-trained or multi-skilled staff

Incorporating technology into teaching Number of courses incorporating new technologyInnovation in teaching Number of teaching workshops attended by faculty,

number of teaching innovation projectsCurriculum innovation Number of curriculum revisions in last five years;

number of new courses offered in last five yearsPartnering with corporations for campusrecruitment

Number of firms involved; number of joint activities

Organizational citizenship Academic excellence; increased research productivity;increased outreach to community

Resource management Number of campus partnerships; entrepreneurialinitiatives; trends in energy use

Table IV.Component three:

innovation and learningperspective: faculty and

staff, organizationaleffectiveness, social

responsibility

Objective Measures

Prosper Annual grants; amount of permanent endowmentSucceed Enrolment trendGrow Enhancement in student intakeSurvive Level of student enrolment; funding per studentMaximize asset utilization More efficient and effective use of facilities, space,

services, systems and resources as measured byvarious usage studies and statistics

Table V.Component four: financial

perspective

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context, but expensive to implement. Figure 1 proposes a schematic model of BSC forinstitutions of higher education in India, based on the model designed by Kaplan andNorton (2001).Kaplan and Norton (1996a) say that companies are using scorecard to:

. clarify and update vision and strategic direction;

. communicate strategic objectives and measures throughout the organization;

. align department and individual goals with the organization’s vision and strategy;

. link strategic objectives to long term targets and annual budgets;

. identify and align strategic initiatives;

. conduct periodic performance reviews to learn about and improve strategy; and

. obtain feedback to learn about and improve strategy.

All the above benefits are relevant in the context of the institutions of higher learningin India. As Pandey (2005), indicates – “a good aspect of BSC is that it is a simple,systematic, easy-to-understand approach for performance measurement, review andevaluation. It is also a convenient mechanism to communicate strategy and strategicobjectives to all levels of management”. According to Kaplan and Norton (2001) the

Figure 1.Proposed balancedscorecard model forinstitutions of highereducation based onKaplan and Norton (2001)

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most important potential benefit is that BSC aligns with strategy leading to bettercommunication and motivation which causes better performance. Considering thelinkages in service management profit chain (Heskett et al., 1994 cited in Kaplan andNorton, 2001) we can say that the potential benefits can be:

. investments in faculty and staff training lead to improvements in service quality;

. better service quality leads to higher customer (stakeholder) satisfaction;

. higher customer satisfaction leads to increased customer loyalty; and

. increased customer loyalty generates positive word of mouth, increasedgrants/revenues and surpluses that can be ploughed into the system for furthergrowth and development.

With growing popularity for Indian Engineers and graduates in job employmentabroad (Chhaparia, 2006), India has to build world-class quality into higher education.In fact, a critical test of a scorecard’s success is its transparency: from the 15-20scorecard measures, an observer is able to see through the organizations corporatestrategy (Kaplan and Norton, 1993). Thus if Higher education institutions apply theBSC to their organization they will be able to position their students and programspositively in the minds of the international audience.

ConclusionUniversities need to be consciously and explicitly managing the processes associatedwith the creation of their knowledge assets and to recognise the value of theirintellectual capital to their continuing role in society and in a wider global marketplacefor higher education (Rowley, 2000).

Translating the BSC to the complex world of academia is a challenge (Ruben, 1999).There are some critical success factors highlighted for higher education institutions inIndia. These factors are critical because if they are executed properly, the institution willachieve excellence in its chosen field(s). It serves as a driving force to move institutionstowards their goals. In the process of reaching these goals, the institutions are confrontedwith many barriers that are difficult to overcome however, many barriers originate fromthe institutions organizational members themselves by way of resistance to change, fearof accountability and its derivative pressure, lack of commitment and fear of failure. Ifquality can be nurtured into the senses of all the functionaries in the institutions, thenorganizational members will engage in the cooperation and commitment required ofthem (Kanji et al., 1999). The BSC approach offers an institution the opportunity toformulate a cascade of measures to translate the mission of knowledge creation, sharingand utilization into a comprehensive, coherent, communicable and mobilizingframework – for external stakeholders and for one another.

The current state of Indian universities and other institutions of higher learning canbenefit through the application of balanced scorecards to cull out areas that they needto urgently focus upon and design appropriate strategies.

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Further reading

Porter, L. and Tanner, S. (2002), Assessing Business Excellence, Butterworth-HeinemannPublications, Oxford.

Corresponding authorVenkatesh Umashankar can be contacted at: umashankarv@iimtobu.ac.in

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